Early retirement withdrawals accelerate, but baby boomers save the most

Didier Malagies • November 27, 2023


Retirement account balances decreased only slightly in the third quarter of 2023, but account withdrawals and loans are inching up as the ongoing effects of inflation continue to impact workers across demographics. This is according to Fidelity Investments’ Q3 2023 retirement analysis.


While retirement savings behaviors continue to remain strong — an “encouraging” sign, Fidelity said — the rise in withdrawals and loans continues to show that Americans are borrowing from their retirement accounts now to stem the tide of higher prices and overall living costs, the analysis found.


“Americans have become accustomed to riding the economic waves of the past several years, and this quarter is no different,” Kevin Barry, president of workplace investing at Fidelity, said in a statement. “They are learning how to stay afloat in very challenging financial conditions — including having enough money set aside should an emergency arise.”


Barry is “pleased” to see retirement savers “stay the course with steady savings rates and continu[ing] commitment to their futures” despite these challenges.


Workers in the baby boomer demographic — or those born between 1946 and 1964 — continue to save for retirement at the highest levels compared with other surveyed generations. Fidelity has a suggested savings rate of 15%; baby boomers, on average, best that rate by nearly two percentage points (16.7%).

However, hardship withdrawals from retirement accounts are on the rise across the board.

Fidelity found that 2.3% of workers took a hardship withdrawal in Q3 2023, an increase over the 1.8% of workers who took such a withdrawal a year ago. Respondents cited “avoiding foreclosure/eviction” and “medical expenses,” respectively, for why they were tapping their retirement savings.


“In Q3, 2.8% of participants took a loan from their 401(k), which is flat from Q2 and up from 2.4% in Q3 2022,” the analysis showed. “The percentage of workers with a loan outstanding has increased slightly to 17.6%, up from 17.2% last quarter and 16.8% in Q3 2022.”


Another recent survey from Charles Schwab found that older Americans are the most reluctant to seek out personalized financial advice, though a majority of baby boomer respondents in that survey (62%) still indicated it was something they would pursue.



The positive response rate increases for each successive generation: 75% for Generation X; 78% for millennials; and 83% for Generation Z.


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